What to Expect

Neely thinks the top is in, and even though the fall off Jun11 has stalled, he thinks that is how it should behave within his system due to the prior triangle.  The STU in contrast expects a Final Surge, a wave C of a normal ABC correction off Mar6.  This chart from their latest STU shows their prime count.  Tim Knight over at Slope of Hope also called Jun11 as the top.  He then let a reader guestblog a really good rebuttal, laying out the scenario for the Final Surge.  I noticed in comments to the prior post that Hank Wernicki says his fractals show that Neely nailed it, and Prechter will have to join his view soon. 

I also note that the many head & shoulders proponents are losing heart as the S&P hovers at the neckline, instead of breaking down; plus when today's shoeshine boy, CNBC, starts spouting off about the H&S pattern, it is usually time to look the other way. 

I could go on, but will say that the preponderance of ewave opinion, including Yves and the wave 4ers, show a growing consensus that the top is in, with the STU (and Yelnick) standing firm that a Final Surge awaits.

As to what to expect, we have had several sharp down Monday's since Jun11.  This is options expiration week, and should be down into Friday as players unload their positions given the increasingly bearish outlook.  (This of course is a bullish sign!)  It should go at least below Dow8k (the 38% retrace is 7960), or if the H&S is a guide, down near Dow7600.  For those of you who follow astrological indicators,  7/17 is also the middle of several well publicized turn dates, which range from 7/14 (Bradley) to 7/22 (Traders Affiliates). 

Comments

[Mike McQuaid]

That chart is worthless. Extend that 1 wave label at the March '09 low back to the "07 high by 1.618 and it takes you to 113, that would be wave 3 down. Extend wave 1 by 2.618 and you'd be negative. Sorry, no cigar.

[AJ]

As I offered some time ago, I believe the probability is that we are in an ED oown starting Oct 2007. The fact that this is not openly discussed suggests it is more likely right than our so-called experts. EWI Wave 1 was simply Wave A down in an Ending Diagonal and not a five-wave move. Their Wave 2 circle will be in fact be Wave a of the B-Wave (second wave of ED) - the b-wave will chop down into Aug/Sept next year 2010, then strong c-wave up to finish Wave B of ED by May 2011, then we get a strong down move from May 2011 into late 2012. All will then be confounded when the D wave breaks above bottom of Wave A (inflation - Oil due for a cycle peak 2013) and then we meander down in Wave E into 2016 before the correction ends.

An August-Sept move up is a high probability based on cycles. So too is the 2010-2011 move up and then the bloodbath down into 2012. The rest in between will be chop and slop.

[elskid]

" The STU in contrast expects a Final Surge, a wave C of a normal ABC correction off Mar6. This chart from their latest STU shows their prime count. "

Wasn't the term "final surge" being used to describe a much bigger move such as a test or break old highs? It would seem me that a "C" of an mere "ABC" does not qualify for such a lofty moniker.

[THE LUNAR CYCLE GUY]

Lunar cycle now is in its weakest phase into July 17 +/-

Lunar Chart here...
http://img102.imageshack.us/img102/3933/moonphasesiq6.jpg

[nick allan]

Talking of dates:

Citi Research notes some interesting seasonal facts over the course of the last 25 years:

1982: DJIA having started to turn sharply lower had a short-term bounce which peaked at 843.80 on 21st July. (Missing the magic date by 4 days) But by 09 August it was nearly 9% lower
1987: DJIA was in a solid bull market, which peaked at a new high of 2,520 on 17th July. By 21st July it was 2.7% lower and while it then rallied strongly we of course ended up with a stock market crash in October.
1990: DJIA was in a solid bull market, which peaked at 3,011 on 17th July. By 23rd July it was 5.25% lower and by mid October it was 20% lower.
1998: DJIA was in a solid bull market, which peaked at 9,413 on 17th July. By 28th July it was 6.6% lower and by mid September it was over 20% lower.
2001: DJIA hit a corrective high of 10,758 on 19th July (again a small miss of the magic date). By 25th July it was 5.5% lower and by the 21 September it was over 26% lower.
2002: DJIA hit a corrective high of 8,765 on 17th July. By 24th July it was 13% lower and by October lower still at the base of the bear market.
2007: DJIA hit a trend high of 14,022 on 17th July. By 01 August it was 6.3% lower and by mid August nearly 11% lower
2008: DJIA had started to move lower but began a bounce on15th July. On 23rd July it had a quick 3 day fall of just under 5% It then rallied again into 11th August but we of course ended up with a stock market crash in October/November in a development eerily similar to 1987.

“So if we look back over all these major years in over a quarter of a century (9 instances) in 7 of them the period from the 17th to the 21st July we have begun a significant move lower in equities. In the 2 instances (1987 and 2008) that we did not immediately head lower we ended up with stock market crashes later in the year…..all in all an ominous set up.”

[Mike McQuaid]

Looking at the S&P500 daily chart off the March 6 low, today we traverse 89 fib days, as a bit of a benchmark. The Gann-styled traders are watching 875 to hold as support expecially since it was breached in the last few days (don't break a weak line twice). If the chart can sermount some of the resistance going back to June 30 a bullish tone may develop. The chart's a little buoyant today, so far

[Mamma Boom Boom]

>>-Can you say 'Rally'? -One of my Day Trading Models went to 40% at noon today. That don't happen often. Posted by: Ned Bushong | Wednesday, July 08, 2009<<

Boys and girls, what do you think? Is there anyplace, anywhere, that you can get more accurate information than right here (ME)? And it's free. It's simply 'BREATHTAKING'.

Ned

[jason]

-Can you say 'Rally'?

This morning it made double bottom. if you have said "rally" this morning I would agree.

[Upstart]

I see multi-year cycles down into Sept. at earliest, or 4th quarter, so we either drop into there or at the least will weigh down in a triangle. So there is no final surge imminent. Final surge would come after those cycles lift late in the year and continue into 2010. No chance at all that the June high gets taken out in the near future.

[barood]

"No chance at all that the June high gets taken out in the near future."

Recipe for trading disaster.

[Upstart]

Yes, I was over the top with that.

[Rob]

July 17th+/- is also McHugh's phi-mate turn date, with the next to follow on September 2nd. He is calling July 17th+/- a bottom. Apparently, he has a few phi-mate dates in September and is predicting a lot of volatility in September. That smells like a top to me. A top in mid-Sept/3rd week would represent time-wise 38% (March 6 on) of the length of the decline from October 2007 to March 6, 2009.

[da bear]

there is a solar eclipse on July 22nd.

da bear

[iota]

if this is a countertrend rally, what should be outside limits to it?
vipul ,whats your view?
you said 878 will be taken out and we ll go into the 860 zone.all that done .now what.
maximum traders are looking to go short on GS earning news.wonder if thats the right set up

[anon_aka_TERA BAAP]

I am VEGETERIAN...and therefore it was difficult for me to watch BLOODY Slaughter of BEARS today..all weekend long..BEARS were LOUDLY proclaming that "TOP is IN"!! but TERA BAAP was lonely Voice of Reason.. now i will Share the WAVE Count..

The rise from 1987 into 2000 was a supercycle wave 1.. the wave 2 an expanded flat extending from the 2000 top into the 2009 low..and now SUPERCYCLE WAVE 3 has BEGUN!!

Imagine the gathering Power of Third Wave..going to NEW all time highs.. while MOM and POP have gone to CASH for the Safety.. and Media is scaring all SMALL Investors!!

we continue higher..my GS calls (WHICH i recomended last week WITHOUT subscripton!!) are through roof..

entire WORLD is bearish...following mr NEELY who keeps loking for lower prices..and getting GORED by the RAGING BULL!

HAHAHAHAHAH

[Forkoholic Serge]

>today we traverse 89 fib days, as a bit of a benchmark

Yep, plus other 43 benchmarks u forgot to mention for some reason ;-)

Jul 13, 2009 Error in Days/Weeks:1
is Lucas 521 CALENDAR WEEKS from Jul 19, 1999
is Lucas SQROOT L(26) \|271443=521 CALENDAR WEEKS from Jul 19, 1999
is Lucas SQUARE 11^2=121 CALENDAR WEEKS from Mar 14, 2007
is Fibonacci SQROOT F(21) \|10946=104 CALENDAR WEEKS from Jul 16, 2007
is Fibonacci SQUARE 21^2=441 TRADING DAYS from Oct 11, 2007
is Lucas SQROOT L(25) \|167761=409 TRADING DAYS from Nov 26, 2007
is Fibonacci SQROOT F(20) \|6765=82 CALENDAR WEEKS from Dec 11, 2007
is Lucas 76 CALENDAR WEEKS from Jan 23, 2008
is Lucas SQROOT L(18) \|5778=76 CALENDAR WEEKS from Jan 23, 2008
is Gann 60 CALENDAR WEEKS from May 19, 2008
is Fibonacci SQROOT F(24) \|46368=215 TRADING DAYS from Sep 02, 2008
is Gann 216 TRADING DAYS from Sep 02, 2008
is Fibonacci SQROOT F(15) \|610=24 CALENDAR WEEKS from Jan 21, 2009
is Gann 120 TRADING DAYS from Jan 21, 2009
is Lucas 18 CALENDAR WEEKS from Mar 06, 2009
is Fibonacci 89 TRADING DAYS from Mar 06, 2009
is Fibonacci SQUARE 3^2=9 CALENDAR WEEKS from May 08, 2009
is Fibonacci SQROOT F(11) \|89=9 CALENDAR WEEKS from May 08, 2009
is Lucas SQUARE 3^2=9 CALENDAR WEEKS from May 08, 2009
is Fibonacci SQUARE 2^2=4 CALENDAR WEEKS from Jun 11, 2009
is Fibonacci SQROOT F(8) \|21=4 CALENDAR WEEKS from Jun 11, 2009
is Lucas SQUARE 2^2=4 CALENDAR WEEKS from Jun 11, 2009
is Lucas 4 CALENDAR WEEKS from Jun 11, 2009
is Lucas SQROOT L(6) \|18=4 CALENDAR WEEKS from Jun 11, 2009
is Fibonacci 21 TRADING DAYS from Jun 11, 2009
is Lucas SQROOT L(13) \|521=22 TRADING DAYS from Jun 11, 2009
is 0.7070 ratio between CALENDAR DAYS Jan 02, 1990 and Nov 30, 1981
is 0.3820 ratio between TRADING DAYS Jul 19, 1999 and Jun 20, 1983
is 2.0000 ratio between TRADING DAYS Aug 08, 1983 and Jul 15, 1996
is 0.3330 ratio between TRADING DAYS Nov 08, 2000 and Aug 08, 1983
is 0.5770 ratio between CALENDAR DAYS May 20, 1996 and Sep 29, 1986
is 2.0000 ratio between CALENDAR DAYS Oct 19, 1987 and Aug 31, 1998
is 0.5770 ratio between TRADING DAYS Jul 20, 1998 and Jul 16, 1990
is 0.2360 ratio between TRADING DAYS Jul 16, 1990 and Dec 30, 1899
is 0.2360 ratio between TRADING DAYS May 13, 2005 and Dec 02, 1991
is 0.5770 ratio between CALENDAR DAYS Oct 10, 2002 and Oct 27, 1997
is 0.6670 ratio between CALENDAR DAYS May 07, 2002 and Oct 05, 1998
is 0.2360 ratio between CALENDAR DAYS Jul 16, 2007 and Jan 31, 2001
is 0.6180 ratio between CALENDAR DAYS Jan 03, 2005 and Mar 19, 2002
is 1.6180 ratio between CALENDAR DAYS Mar 19, 2002 and Jan 03, 2005
is 0.4470 ratio between CALENDAR DAYS Jun 14, 2006 and Aug 22, 2002
is 0.2360 ratio between TRADING DAYS Nov 26, 2007 and Aug 22, 2002
is 0.4470 ratio between TRADING DAYS Feb 27, 2008 and Jun 14, 2006
is 2.0000 ratio between TRADING DAYS Mar 06, 2009 and May 08, 2009
Count is:44

[Bollinger]

"I am VEGETERIAN..."

Sorry to hear that you can not afford meat anymore.
Buying calls for all the money at the top has a price.
Maybe you should use tighter stops.

[DG]

following mr NEELY who keeps loking for lower prices..and getting GORED by the RAGING BULL!

Neely's Hourly trading recommendations actually yielded a 32 point ES profit yesterday. That's 43 ES points for Hourly traders since the June 11th top Neely called.

As I have said before, there is a difference between forecasting and trading and a good trader can maneuver around a bad forecast and still make money. As I've also said, unless we break the June 11th top, anything said by any bull is basically noise.